Honeycutt Co. recently engaged in an exchange of equipment with ABC Co. The foll
ID: 2583784 • Letter: H
Question
Honeycutt Co. recently engaged in an exchange of equipment with ABC Co. The following information pertains to the equipment each company owned immediately before the exchange:
Honeycutt Co.
ABC Co.
Equipment cost
$431,675
$263,140
Accumulated depreciation
147,920
84,510
Fair value
269,360
218,855
In addition, Honeycutt received $50,505 cash from ABC.
REQUIRED: Give the entry Honeycutt Co. must make to account for this exchange. Assume the exchange has commercial substance.
Honeycutt Co.
ABC Co.
Equipment cost
$431,675
$263,140
Accumulated depreciation
147,920
84,510
Fair value
269,360
218,855
Explanation / Answer
Calcultion of Gain or (Loss) for Honeycutt Co
Jounnal Entry for Honeycutt Co
Description Amount ($) Fair value of Equipment 269,360 Less : Book value of the equipment : ( $431,675 - $147,920) 283,755 Loss (14,395)Related Questions
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